Production at three facilities of Ranbaxy Laboratories [Get Quote] could be banned if charges of fraud, forging of documents and manufacturing from unapproved locations, levelled by the US Food and Drug Administration against the drug-maker, are proved.

Experts said it is the first time that an Indian pharmaceutical company has been charged with such serious offences, and that the firm may be prosecuted if the allegations are proved.

Able Labs of the US, now a unit of Sun Pharma [Get Quote] through an acquisition in 2005, had to face similar charges in 2004-2005.

The US has the most stringent drug regulatory mechanism in the world and issuance of 'Warning Letters' (which threaten companies with cancellation of approval for selling drugs in the US for not adhering to the stipulations) are common. Some of the Indian drug exporters to the US, including Wockhardt, had received such letters earlier, sources said.

The new development could show the entire Indian pharmaceutical industry in a bad light. "If India's largest pharmaceutical company is facing such serious allegations, most of the regulators worldwide are likely to review data and products of Indian companies with more caution," said an industry leader.

As a result, regulators may insist on stringent audits, repeated inspections, cross-verification of various data submitted for approval, he said.

Already, a section of the US and European drug industry lobby, such as the Pharmaceutical Research and Manufacturers of America (PhRMA), is demanding close monitoring of drugs and raw materials imported from countries such as China and India.

In a statement, Ranbaxy, however, said its business in the US continues as normal. The drug-maker also strongly denied the allegations in the motion that has been filed, and not granted, by the US Department of Justice, seeking certain documents.

"No legal proceedings in the sense of a prosecution have been initiated. The company continues to cooperate with the Justice Department in regards to the investigation and has agreed to produce the specific documents sought by the motion. Ranbaxy will be filing a response in the US District Court for The District of Maryland and will strongly defend its position", the statement said.

Ranbaxy also said the investigation had been underway for approximately three years now and no charges have been filed against it.

"The FDA has also gathered over 200 random samples of various products marketed by the company in the US.

These products have been independently tested by the USFDA and were found to be complying with all the specifications. Under these circumstances, the company finds that the allegations are baseless," the statement added.